By adapting and adopting new technologies, it is possible to take away the age-old chore of expense claims. The usual method was to list them all out on a spreadsheet, attach the original documents to the printed spreadsheet and pass them for approval. Once approved, the spreadsheet would then be passed to accounts, and someone keys them, or at least the totals, into the accounts software.
There is now a plethora of choice of prepaid credit cards. Generally, a “master” account is created, with a “float” (e.g. £1,000) and then individuals can be assigned a sum from this. It is possible to set automatic top-ups, so that when an individual’s balance falls below a certain sum, an amount is transferred from the float to top it back up to its assigned limit.
Simply taking a photograph of a receipt is sufficient, with the data being extracted using OCR to populate the expense claim. Forget to attach a receipt and you are likely to be constantly bombarded with email reminders until you do attach it! Taking a photo as soon as you get the receipt ensures it is not lost and forgotten about.
Once captured, all data is readily available to view across all employees. The next automation step is to send this data, either instantly, or with a couple of clicks, across to the accounting software. No keying necessary.
If someone loses a card or perhaps misuses it, it is possible to place a stop on it immediately from within the software, and it can be reenabled in a similar fashion.
A nice feature in some of the cards is the ability to instantly create unique ‘virtual cards’ for safer use online when making one-off or even recurring payments. Once the transaction has been processed on a virtual card, that number is no longer valid and will not work again.
The prepaid credit card can also replace the traditional ‘petty cash”. Petty cash has various risks attached. This is often also ignored as being too small to worry about, and VAT on expenses is often not claimed either. Replacing it with prepaid cards addresses all these potential issues.
A further interesting and potentially useful card is the “Curve” card. This can be used like any other card, but it is linked to as many other cards beneath it as you want. You choose which card the transaction is charged against. Used the wrong card? No problem- within 14 days go back in time and move it to another card. Made a payment on a personal card for a business expense you want reimbursed? Simply move the slider to indicate it is business and it appears in the accounts software. Curve must be my favourite card!
The drawbacks with prepaid cards? Unfortunately, some people do not have enough trust in their staff that they will not use it as intended! It does also need funds stored on the cards, so the “credit terms” you might obtain using credit cards is forgone. Some credit cards also offer cash back on spending, or other types of incentive for use. Spend £5,000 a month on credit card giving uncapped 1% cash back and that is £600 p.a. for nothing effectively.
Do you use prepaid cards?
Have you replaced petty cash?